Going their own way

One of the big trade offs for most retailers is the balance between stocking brands and own-bought products. Over the past year Debenhams has been making a gradual shift to more own bought product, which this morning’s full-year trading update showed has boosted margins and profits but at the expense of like-for-like sales growth.

Debs can afford to do this because its stable of own-bought brands, particularly Designers at Debenhams, is very strong, and it has added to that strength with the purchase of Principles and today Faith, a brand which I’m sure will do very well with a bit of TLC.

But there’s a delicate balance to be found. The best brands and concessions are footfall drivers for department stores, and making sure that all groups of customers feel there’s still something in the store for them is important. Pulling out an Alexon concession to make room for Henry Holland might help freshen up a store, but could also make a more mature shopper feel there’s nothing in the store for them.

Debs’ management team is one of the wisest in the business, with chief executive Rob Tenmpleman’s store expertise backed up by the product knowledge of his deputy and heir apparent Michael Sharp, who surely will be taking over the reins before too long. They’ll know what the right balance is, and having got the business on a strong footing after its controversial float, would be unlikely to do anything which would jeopardise what has become one of retail’s success stories.

International is likely to be the other big story with Debs, and following the takeover of Danish department store chain Magasin du Nord, I expect other takeovers of struggling European department store chains to be on the agenda before long.